Sounds like this OW isn't such a bad OW. I think maybe she thought she was talking to someone, an old dear friend but quickly realized she crossed a line with him when he "joked" about meeting up with her and she's trying to do the right thing...be nice, but firm about "I don't want to see you, this isn't what you think it is." Be grateful about that and hope she stays away.
I think you need to lay low and ride this out. Stay out of his space and let him come to you. You and D just go about life and live as you should.
There's really not much you can do to snap him out of this anyways.
